Net Income Increased to $2.5 million
Publishing Revenue Increased 28% Led by Resurgent Direct Market Sales
Sale of CTM Media Completed
NEWARK, NJ and LOS ANGELES, CA / ACCESSWIRE / June 14, 2021 / IDW Media Holdings, Inc. (OTC PINK:IDWM), an integrated media company, today reported net income per share of $0.25 on revenue of $10.1 million for the three months ended April 30, 2021.
Second Quarter Fiscal 2021 (2Q21) Highlights
- Consolidated revenue increased to $10.1 from $9.3 million in 2Q20.
- COVID-19 Update: At IDW Publishing, direct market sales continued to recover. IDW Entertainment continued to be impacted by industry-wide production / greenlight delays.
- Consolidated income from operations decreased to $0.4 million compared to $1.3 million in 2Q20.
- Net income per share increased to $0.25 from a loss per share of $(0.04) in 2Q20 boosted by a gain on the sale of CTM Media of $0.21 per share.
- IDW Publishing, long a leader in industry critical acclaim, was nominated for eleven (including one shared nomination) 2021 Will Eisner Comic Industry Awards. The prestigious awards honor exemplary work in comics publishing.
. Comments from Ezra Rosensaft, Chief Executive Officer
"IDW continued to progress financially and operationally during the second quarter highlighted by a return to profitability even as we ramped up our investment in exciting long-term growth opportunities.
"IDW Publishing achieved solid year over year revenue growth reflecting sustained execution on its strategic priorities including continuing genre expansion, leveraging high yield opportunities in the ecommerce space, as well as the resurgence of direct market sales, leading with chart-topping comic releases and increased in-person foot traffic in local comic shops.
"At IDW Entertainment Locke & Key seasons 2 and 3, greenlit by Netflix, are making progress on their respective production paths as COVID pandemic restrictions ease. Netflix plans to premiere season 2 in October. We are also excited about other projects that we are working to bring to market.
"Finally, we are working toward registering our securities with the SEC in preparation for our planned uplist to a national exchange. Our uplist is on track for completion this summer."
Consolidated P&L Highlights
(In millions, except income (loss) per share, unaudited) | 2Q21 | 1Q21 | 2Q20 | |||||||||
Revenue | $ | 10.1 | $ | 8.4 | $ | 9.3 | ||||||
Direct cost of revenue | $ | 4.7 | $ | 9.2 | $ | 3.3 | ||||||
SG&A including non-cash compensation | $ | 4.9 | $ | 4.2 | $ | 4.6 | ||||||
Non-cash compensation included in SG&A | $ | 0.1 | $ | 0.1 | $ | 0.2 | ||||||
Depreciation & amortization | $ | 0.1 | $ | 0.1 | $ | 0.1 | ||||||
Income (loss) from operations | $ | 0.4 | $ | (5.1) | $ | 1.3 | ||||||
Net income (loss) from continuing operations | $ | 0.6 | $ | (5.1) | $ | 1.3 | ||||||
(Loss) from discontinued operations, net | $ | (0.2) | $ | (1.1) | $ | (1.6) | ||||||
Gain on sale of discontinued operations | $ | 2.1 | - | - | ||||||||
Net income (loss) | $ | 2.5 | $ | (6.3) | $ | (0.4) | ||||||
Income (loss) per share - continuing operations | $ | 0.27* | $ | (0.51) | $ | 0.15 | ||||||
Loss per share - discontinued operations | $ | (0.02) | $ | (0.11) | $ | (0.19) | ||||||
Net income (loss) per share | $ | 0.25 | $ | (0.62) | $ | (0.04) |
* Sale of discontinued operations included
Segment P&L Highlights
(Does not include corporate overhead.)
(in millions, unaudited) | 2Q21 | 1Q21 | 2Q20 | |||||||||
Revenue | ||||||||||||
IDW Publishing | $ | 6.0 | $ | 5.6 | $ | 4.7 | ||||||
IDW Entertainment | $ | 4.2 | $ | 2.8 | $ | 4.6 | ||||||
(Loss) income from operations* | ||||||||||||
IDW Publishing | $ | (0.5) | $ | (0.4) | $ | (0.6) | ||||||
IDW Entertainment | $ | 1.2 | $ | (4.6) | $ | 2.2 | ||||||
CTM* | $ | (0.2) | $ | (1.1) | $ | (1.6) | ||||||
Corporate (unallocated overhead) | $ | (0.3) | $ | (0.2) | $ | (0.2) |
*CTM's bottom-line results are reported as ‘Net (loss) income from discontinued operations' in all periods presented.
Financial Take-Aways
- Revenue:
- IIDW Publishing ("IDWP"): Direct market recovery drove publishing revenue growth, led by titles from high profile properties - both original and licensed - including Locke & Key/The Sandman Universe crossover, Sonic the Hedgehog, X-Men, and TMNT. Sales to major retailers contributed nearly half of IDWP revenue. Sales through other brick-and-mortar retailers contributed a smaller but growing share of IDWP sales.
- IDW Entertainment (IDWE): Revenue was generated by the finalization of credits for production of V-Wars and October Faction from the Canadian Revenue Agency (CRA) and the delivery of final episodes of Wynonna Earp, Season 4.
- (Loss) Income from Operations:
- IDWP: The quarter's loss was primarily attributable to non-routine factors including a write-down of capitalized expenses related to tabletops games, a line of business from which IDWP has exited, and severance expense as well as increased personnel expense.
- IDWE: Income from operations decreased due to the amortization of production expenses for episodes of Wynonna Earp Season 4 episodes delivered during the quarter.
- CTM Media: CTM Media's results were reported as discontinued operations for all periods presented. The CTM sale was consummated on February 15, 2021, which was reflected this quarter as a gain on the sale of discontinued operations.
- Balance Sheet Highlights: At April 30, 2021, IDW's cash balance was $7.6 million. Working capital (current assets less current liabilities) totaled $13.1 million.
Earnings Conference Call
IDW's management will host an earnings conference call beginning at 5:00 PM Eastern to present results, outlook and strategy followed by Q&A with investors.
To listen to the call and participate in the Q&A, dial 1-877-705-6003 (toll free - U.S.) or 1-201-493-6725 (toll - international) and request the ‘IDW Media call.'
A replay of the conference call can be accessed approximately three hours after the call concludes through June 21, 2021 by dialing 1-844-512-2921 (toll free - U.S.) or 1-412-317-6671 (toll - international) and providing this replay PIN number: 13720075. A replay will also be available via streaming audio through the IDW investor relations website.
About IDW
IDW (OTC PINK:IDWM) is an integrated media company providing compelling stories and characters for global audiences. Our IDW Publishing and IDW Entertainment businesses acquire IP for holistic franchise development and leverage established stories across multiple entertainment platforms including comics and graphic novels, television and merchandise.
Investor Contact
IDW Media Investor Relations
investor.relations@idwmh.com
IDW MEDIA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) | April 30, 2021 (unaudited) | October 31, 2020 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 7,607 | $ | 10,541 | ||||
Trade accounts receivable, net | 22,063 | 22,921 | ||||||
Inventory | 3,667 | 3,754 | ||||||
Prepaid expenses | 2,178 | 1,361 | ||||||
Current assets held for sale from discontinued operations | - | 11,171 | ||||||
Total current assets | 35,515 | 49,748 | ||||||
Property and equipment, net | 364 | 410 | ||||||
Right-of-use assets, net | 539 | 771 | ||||||
Non-current assets | ||||||||
Investments | - | 25 | ||||||
Intangible assets, net | 30 | 52 | ||||||
Goodwill | 199 | 199 | ||||||
Television costs, net | 1,270 | 2,926 | ||||||
Other assets | 325 | 527 | ||||||
Total assets | $ | 38,242 | $ | 54,658 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 1,163 | $ | 1,406 | ||||
Accrued expenses | 5,424 | 3,953 | ||||||
Deferred revenue | 2,125 | 2,385 | ||||||
Bank loans payable - current portion | 11,664 | 14,204 | ||||||
Government loans- current portion | 1,320 | 793 | ||||||
Operating lease obligations - current portion | 603 | 562 | ||||||
Other current liabilities | 80 | 69 | ||||||
Current liabilities held for sale from discontinued operations | - | 8,540 | ||||||
Total current liabilities | 22,379 | 31,912 | ||||||
Non-current liabilities | ||||||||
Operating lease obligations - long term portion | 59 | 368 | ||||||
Government loans - long term portion | 1,071 | 403 | ||||||
Related party loans payable - long term portion | - | 3,750 | ||||||
Total non-current liabilities | 1,130 | 4,521 | ||||||
Total liabilities | $ | 23,509 | $ | 36,433 | ||||
Stockholders' equity (see note 3): | ||||||||
Preferred stock, $.01 par value; authorized shares - 500; no shares issued at April 30, 2021 and October 31, 2020 | - | - | ||||||
Class B common stock, $0.01 par value; authorized shares - 12,000; 10,024 and 9,987 shares issued and 9,505 and 9,467 shares outstanding at April 30, 2021 and October 31, 2020, respectively | 94 | 93 | ||||||
Class C common stock, $0.01 par value; authorized shares - 2,500; 545 shares issued and outstanding at April 30, 2021 and October 31, 2020 | 5 | 5 | ||||||
Additional paid-in capital | 94,267 | 111,379 | ||||||
Accumulated other comprehensive loss | - | (60) | ||||||
Accumulated deficit | (78,437) | (91,996) | ||||||
Treasury stock, at cost, consisting of 519 shares of Class B common stock at April 30, 2021 and October 31, 2020 | (1,196) | (1,196) | ||||||
Total stockholders' equity | 14,733 | 18,225 | ||||||
Total liabilities and stockholders' equity | $ | 38,242 | $ | 54,658 | ||||
IDW MEDIA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended April 30, | Six Months Ended April 30, | |||||||||||||||
(in thousands, except per share data) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenues | $ | 10,140 | $ | 9,268 | $ | 18,552 | $ | 19,605 | ||||||||
Costs and expenses: | ||||||||||||||||
Direct cost of revenues | 4,726 | 3,295 | 13,959 | 14,912 | ||||||||||||
Selling, general and administrative | 4,910 | 4,583 | 9,149 | 9,019 | ||||||||||||
Depreciation and amortization | 60 | 61 | 120 | 128 | ||||||||||||
Bad debt expense | 11 | - | 11 | - | ||||||||||||
Total costs and expenses | 9,707 | 7,939 | 23,239 | 24,059 | ||||||||||||
Income (loss) from operations | 433 | 1,329 | (4,687) | (4,454) | ||||||||||||
Interest income (expense), net | 156 | (10) | 142 | (20) | ||||||||||||
Other expense, net | (12) | (35) | (13) | (61) | ||||||||||||
Income (loss) before income taxes | 577 | 1,284 | (4,558) | (4,535) | ||||||||||||
Provision for income taxes | - | - | - | - | ||||||||||||
Net income (loss) from continuing operations | 577 | 1,284 | (4,558) | (4,535) | ||||||||||||
Loss from discontinued operations, net | (159) | (1,638) | (1,280) | (2,692) | ||||||||||||
Gain on sale of discontinued operations | 2,123 | - | 2,123 | - | ||||||||||||
Net income (loss) | $ | 2,541 | $ | (354) | $ | (3,715) | $ | (7,227) | ||||||||
Basic and diluted income (loss) per share (note 2): | ||||||||||||||||
Continuing operations | $ | 0.27 | $ | 0.15 | $ | (0.24) | $ | (0.56) | ||||||||
Discontinued operations | (0.02) | (0.19) | (0.13) | (0.33) | ||||||||||||
Net income (loss) | $ | 0.25 | $ | (0.04) | $ | (0.37) | $ | (0.89) | ||||||||
Weighted-average number of shares used in the calculation of basic and diluted income (loss) per share: | 9,972 | 8,845 | 9,962 | 8,143 | ||||||||||||
IDW MEDIA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six months ended April 30, | ||||||||
(in thousands) | 2021 | 2020 | ||||||
Operating activities: | ||||||||
Net loss | $ | (3,715) | $ | (7,227) | ||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 307 | 527 | ||||||
Amortization of finance leases | 108 | 165 | ||||||
Bad debt expense | (97) | 482 | ||||||
Stock based compensation | 82 | 520 | ||||||
Stock options | 77 | 333 | ||||||
Amortization of right-of-use asset | 513 | 995 | ||||||
Gain on sale of discontinued operations | (2,123) | - | ||||||
Loss on deconsolidation of subsidiary | - | 35 | ||||||
Changes in assets and liabilities: | ||||||||
Trade accounts receivable | 847 | 8,591 | ||||||
Inventory | 88 | (820) | ||||||
Prepaid expenses and other assets | (589) | 115 | ||||||
Television costs | 1,656 | 6,872 | ||||||
Right-of-use assets | (269) | (814) | ||||||
Trade accounts payable, accrued expenses and other current liabilities | 1,239 | (2,702) | ||||||
Deferred revenue | (260) | 1,254 | ||||||
Gain on extinguishment of PPP loan | (68) | - | ||||||
Gain on disposal of ROU assets | (97) | - | ||||||
Deconsolidation of subsidiary | - | 339 | ||||||
Net cash (used in) provided by operating activities | (2,301) | 8,665 | ||||||
Investing activities: | ||||||||
Disposition of subsidiary, net of cash received | - | (115) | ||||||
Disposal of discontinued operations | (902) | - | ||||||
Capital expenditures | (72) | (299) | ||||||
Net cash used in investing activities | (974) | (414) | ||||||
Financing activities: | ||||||||
Proceeds from issuance of common stock | 25 | 13,268 | ||||||
Repayments of finance lease obligations | - | (207) | ||||||
Proceeds of bank loans | - | 2,217 | ||||||
Proceeds from government loans | 1,196 | - | ||||||
Repayments of related party loans | - | (4,050) | ||||||
Repayments of bank loans | (2,540) | (13,732) | ||||||
Net cash used in financing activities | (1,319) | (2,504) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 39 | (45) | ||||||
Net (decrease) increase in cash and cash equivalents | (4,555) | 5,702 | ||||||
Cash and cash equivalents at beginning of period | 12,162 | 10,165 | ||||||
Cash and cash equivalents at end of period | $ | 7,607 | $ | 15,867 | ||||
Supplemental schedule of investing and financing activities | ||||||||
Cash paid for interest | $ | - | $ | 18 | ||||
Cash paid for income taxes | $ | - | $ | - | ||||
SOURCE: IDW Media Holdings Inc.
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